There is visceral pain in the lending industry, particularly but not exclusively in the subprime market. Take a look at two recent articles, both courtesy of Bloomberg. First, there was a report that New Century Financial Corp. is the subject of a criminal probe and might not come out of it intact. http://www.bloomberg.com/apps/news?pid=20601087&sid=a6f3B98Wbzg8&refer=home.
Countrywide, meanwhile, is smiling as it says the subprime market is too crowded. The article quotes CFO Eric Sieracki as saying "We have a lot of subprime lenders out there for sale, and at the end of the day, their liquidations will be a great thing."The second article reports that David Einhorn, founder of Greenlight Capital LLC, just quit the board of New Century. The article reports that New Century shares "have plunged almost 90 percent since Einhorn joined the board last March, handing Greenlight a loss of about $140 million on its stake during his tenure." Ouch. http://www.bloomberg.com/apps/news?pid=20601087&sid=asiYkh.yMqYw&refer=home.
Is this only the beginning?
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